Zimbabwe in fiscal crisis

Government calls 700% inflation its `No. 1 enemy'

November 24, 2003|By Laurie Goering, Tribune foreign correspondent.

JOHANNESBURG — Zimbabwe, once one of Southern Africa's richest nations, now admits that runaway inflation will reach 700 percent next year and that the nation's economy, which has shrunk 13 percent this year, is likely to contract about 9 percent more in 2004.

Inflation is the ailing country's "No. 1 enemy," Finance Minister Herbert Murerwa said in unveiling the 2004 budget last week. But he offered no plan for slowing price increases, stemming the collapse of the country's currency or managing the nation's myriad other economic crises, from a desperate lack of currency to shortages of staples such as gasoline and bread.

Zimbabwe has seen its economy head toward collapse since longtime and increasingly unpopular President Robert Mugabe rigged 2001 presidential elections to remain in office and then seized much of the country's white-owned farmland, which was distributed to political allies and landless peasants.

Since then, economic output has plunged as farms largely sit idle--farm output fell 20 percent last year--and factories have closed their doors, forced out of business by draconian government laws that forced them to sell below the cost of production.

Residents of the capital city Harare now predict that 2004 will be the "toughest year outside a war situation." Many buses charge fees beyond what users can pay, forcing thousands each day to walk to work.

Power outages have become a regular occurrence in the capital, and parts of some poorer districts are entirely dark at night. Recently, water to the Kuwadzana slum district was cut off after the city ran out of hard currency to buy imported water-treatment chemicals.

Such hardships led to one of the country's most striking protest marches so far, organized by the Zimbabwe Congress of Trade Unions on Tuesday. Marchers in Harare and in Bulawayo, the country's second-largest city, were quickly arrested by truncheon-wielding police. But the list of 88 detainees for the first time read like a Who's Who of Zimbabwean opposition politics and included nearly all the union leadership and top civic organizers, who previously had been reluctant to risk being jailed.

Most were released on bail Thursday, but only after being charged with organizing an illegal political demonstration. Under Zimbabwe's security laws, protests must first be approved by Mugabe's government.

Meanwhile, 14 other opposition figures were arrested Friday on charges they circulated what the government called "a subversive e-mail inciting the public to oust President Mugabe from office." The e-mail apparently called for street demonstrations this week.

The protests came after a state visit by Nigerian President Olusegun Obasanjo, whose country will hold a summit of former British Commonwealth nations next month. Mugabe, not included because of Commonwealth sanctions against Zimbabwe, has been pressing for an invitation.

That has put Obasanjo in a tight political spot between nations such as South Africa, who want Mugabe to attend, and countries such as Australia and New Zealand, who have promised to boycott the meeting if Mugabe is invited.

South Africa's government also is coming under pressure for its policy of "quiet diplomacy" toward Zimbabwe, which has failed to produce any visible political change even as thousands of hungry illegal Zimbabwean immigrants pour over the border.

This Day, a new Nigerian-owned newspaper in South Africa, recently published a special edition on Zimbabwe, with a front-page editorial arguing that it was "outraged by Africa's lethargy and silence." Such silence from South Africa, "a beneficiary of the voices of the world who spoke up and instituted hard-hitting sanctions against the apartheid government," was a particular offense, it noted.

Zimbabwe, meanwhile, slips deeper into economic chaos. Earlier this month, police and intelligence officials desperate for foreign currency set up roadblocks around Bulawayo, seizing any foreign cash found on passing tourists and locals. Most were told they would later be reimbursed in local currency at the official government exchange rate of 840 Zimbabwe dollars to the U.S. dollar, well below the common street exchange rate of about 6,000 to 1.

The seizures came despite Zimbabwe regulations making it legal to carry up to $250 in U.S. currency.